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SL Green Realty Corp. (NYSE:SLG) Q4 2024 Earnings Conference Call January 23, 2024 2:00 PM ET Company Participants Marc Holliday - Chairman and CEO Matthew DiLiberto - CFO Steve Durels - EVP, Director, Leasing and Real Property Harrison Sitomer - CIO Conference Call Participants Nick Yulico - Scotiabank Alexander Goldfarb - Piper Sandler John Kim - BMO Capital Markets Steve Sakwa - Evercore ISI Jeffrey Spector - Bank of America Securities Anthony Paolone - JPMorgan Michael Griffin - Citi Ronald Kamdem - Mor ...

Financial Data and Key Metrics Changes - The company reported a normalized FFO of $4.95 for Q4, which was $0.09 ahead of expectations, driven by better property performance and higher NOI [30][31] - The company ended the year with a 92.5% occupancy rate and projects over 93% leased occupancy for the coming year [8][10] Business Line Data and Key Metrics Changes - The company achieved 188 individual leasing deals totaling 3,600,000 square feet, marking the third highest leasing year ever [6][10] - The leasing pipeline includes approximately 900,000 square feet, with 600,000 square feet of leases out and another 300,000 square feet of advanced term sheets [9][35] Market Data and Key Metrics Changes - The availability rate in trophy buildings in New York City is at 6.7%, down nearly 200 basis points from Q3 2025, indicating tightening supply [14] - The city is forecasted to create about 38,000 new office-using jobs in 2025, translating to an expected absorption of 1,000,000 square feet for each sector [15][16] Company Strategy and Development Direction - The company is optimistic about the future, citing a confluence of diminishing supply and escalating demand for office space in New York City [15][20] - The company is actively pursuing office-to-residential conversions, tracking about 15,000,000 square feet of residential space being developed from office buildings [18][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic recovery of New York City, highlighting strong job creation and rising on-site attendance [15][16] - The company anticipates strong demand for office space throughout 2025, driven by companies calling employees back to the office [15][16] Other Important Information - The company closed on its opportunistic debt fund, expecting to round it out to over $1,000,000,000 in the first half of the year [7][8] - The hospitality and entertainment side of the business has seen significant visitor numbers, contributing to profits [24] Q&A Session Summary Question: Can you walk through how Q4 and the year played out regarding FFO? - Management indicated that Q4 exceeded expectations with a normalized FFO of $4.95, driven by better property performance and incremental fee income [30][31] Question: Can you discuss the leasing pipeline and its focus? - The leasing pipeline is broad-based, with significant deals across various sectors, including financial services and media [33][35] Question: What is driving the recent uptick in leasing activity? - The uptick is attributed to maturing conversations and new requirements emerging, with a notable portion being new tenants rather than renewals [40][41] Question: Can you comment on the impact of the New York City congestion tax? - Management stated it is too early to assess the impact, as traffic patterns are still adjusting post-holidays [51][53] Question: How is the brokerage community responding to market tightness? - Tenants are becoming increasingly aware of the tightening market and are starting to consider renewals earlier [56][58] Question: What are the expectations for new development sites? - The company is actively seeking new development opportunities and will assess yield expectations during upcoming roadshows in Asia [61][62] Question: How is the financing market for office buildings? - Lenders are showing strong momentum, with significant transactions occurring and expectations for an active year in credit markets [87][88] Question: What is the outlook for capital expenditures? - Management indicated that as occupancy stabilizes, leasing capital expenditures will decrease, while maintenance CapEx remains nominal [95][96]

SL Green Realty Corp. is a self-managed real estate investment trust, or REIT, with in- house capabilities in property management, acquisitions and dispositions, debt investing, financing, development, redevelopment, construction and leasing. As of December 31, 2024, the Company held interests in 54 buildings totaling 30.6 million square feet. This included ownership interests in 27.0 million square feet in Manhattan buildings and 2.8 million square feet securing debt and preferred equity investments. Quest ...

Core Insights - SL Green Realty Corp. reported Q4 2024 FFO per share of $1.45, missing the Zacks Consensus Estimate of $1.53, and down from $0.72 in the previous year [1][2] - For the full year 2024, FFO per share was $5.03, a 1.8% increase year-over-year, but also missed the consensus estimate of $7.78 [3] Financial Performance - Q4 net rental revenues were $139.6 million, slightly below the Zacks Consensus Estimate of $140 million, but up 5.8% year-over-year [2] - Same-store cash NOI decreased 2.7% year-over-year to $145.5 million, excluding lease termination income [4] - Rental revenues for 2024 were $543 million, down 10.1% year-over-year, and marginally missed the consensus mark of $543.4 million [3] Leasing Activity - In Q4, SL Green signed 48 office leases totaling 1.8 million square feet in Manhattan, with a 9% increase in mark-to-market rents compared to previous fully escalated rents [5] - The average lease term for new Manhattan office leases was 10.6 years, with tenant concessions averaging 12.5 months of free rent [5] - As of Dec. 31, 2024, Manhattan's same-store office occupancy was 92.5%, up from 90.1% in the prior quarter [6] Interest Expenses and Debt - Interest expenses increased 39.2% year-over-year to $38.2 million [6] - The net carrying value of the company's debt and preferred equity portfolio was $303.7 million, a 3.3% increase from the previous quarter [8] Portfolio Activity - In November 2024, SL Green sold an 11% interest in One Vanderbilt Avenue for net proceeds of $189.5 million [7] - The company also sold three Giorgio Armani Residences for $61.5 million and acquired a 45% interest in 10 East 53rd Street for $7.2 million [7] Liquidity and Dividends - As of the end of Q4, cash and cash equivalents were $184.3 million, down from $188.2 million at the end of Q3 [8] - On Jan. 21, 2025, the company declared a monthly dividend of 25.75 cents per share, payable on Feb. 18 [10]

SL Green (SLG) reported $139.61 million in revenue for the quarter ended December 2024, representing a year-over-year increase of 5.8%. EPS of $1.45 for the same period compares to -$2.45 a year ago.The reported revenue represents a surprise of -0.31% over the Zacks Consensus Estimate of $140.04 million. With the consensus EPS estimate being $1.53, the EPS surprise was -5.23%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determin ...

Core Insights - SL Green (SLG) reported quarterly funds from operations (FFO) of $1.45 per share, missing the Zacks Consensus Estimate of $1.53 per share, but showing an increase from $0.72 per share a year ago, resulting in an FFO surprise of -5.23% [1] - The company posted revenues of $139.61 million for the quarter ended December 2024, which was 0.31% below the Zacks Consensus Estimate, but an increase from $131.93 million year-over-year [2] - SL Green shares have underperformed the market, losing about 1.1% since the beginning of the year compared to the S&P 500's gain of 2.9% [3] FFO Outlook - The future performance of SL Green's stock will largely depend on management's commentary during the earnings call and the company's FFO outlook, which includes current consensus expectations for upcoming quarters [4][6] - The current consensus FFO estimate for the next quarter is $1.36 on revenues of $140.48 million, and for the current fiscal year, it is $5.51 on revenues of $566.03 million [7] Industry Context - The REIT and Equity Trust - Other industry, to which SL Green belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in estimate revisions, which can be tracked by investors [5]

Financial and Operating Highlights - Net income attributable to common stockholders was $0.13 per share in Q4 2024, compared to a net loss of $2.45 per share in Q4 2023 [4] - Funds from operations (FFO) were $1.81 per share in Q4 2024, including $26.0 million gain on discounted debt extinguishment and $7.7 million positive non-cash fair value adjustments, compared to $0.72 per share in Q4 2023 [4] - FFO for the full year 2024 was $8.11 per share, including $216.1 million gains on discounted debt extinguishments and $5.3 million positive non-cash fair value adjustments, compared to $4.94 in 2023 [4] - Signed 48 Manhattan office leases covering 1,789,996 square feet in Q4 2024, with mark-to-market rents 9.0% higher than previous rents [4] - Manhattan same-store office occupancy increased to 92.5% as of December 31, 2024 [4] Investing Highlights - Sold an 11.0% interest in One Vanderbilt Avenue for a gross asset valuation of $4.7 billion, generating net proceeds of $189.5 million [4] - Sold three Giorgio Armani Residences at 760 Madison Avenue, generating net proceeds of $61.5 million, with remaining units under contract expected to close in Q1 2025 [4] - Acquired 500 Park Avenue for $130.0 million, financed with an $80.0 million mortgage at a fixed rate of 6.57% [4] - Acquired partner's 45.0% interest in 10 East 53rd Street for $7.2 million [4] Financing Highlights - Repaid $60.9 million mortgage on 690 Madison Avenue for a net payment of $32.1 million [4] - Modified and extended $360.0 million mortgage on 100 Park Avenue, extending maturity to December 2027 and securing a new $70.0 million future funding facility [4] - Modified and extended $1.3 billion mortgage facility on One Madison Avenue, extending final maturity to November 2027 [4] - Completed $5.3 billion of strategic debt refinancings, modifications, and extensions in 2024 [13] Special Servicing and Asset Management - Expanded special servicing business with active assignments totaling $5.0 billion and an additional $8.2 billion designated as special servicer [27] - Cumulative special servicing and asset management appointments total $21.5 billion since inception [27] Leasing Activity - Signed 188 Manhattan office leases covering 3,607,924 square feet in 2024, with mark-to-market rents 8.5% higher than previous rents [12][14] - Average rent on Manhattan office leases signed in 2024 was $87.91 per rentable square foot with an average lease term of 10 years [12][14] Debt and Preferred Equity Investment - Carrying value of debt and preferred equity portfolio was $518.4 million at December 31, 2024, with a weighted average current yield of 7.3% [19] - Invested $15.5 million in real estate debt and CMBS during Q4 2024 [21]

NEW YORK, Jan. 22, 2025 (GLOBE NEWSWIRE) -- SL Green Realty Corp. (NYSE: SLG), Manhattan’s largest office landlord, today announced that it has signed a 92,663-square-foot expansion lease with IBM at One Madison Avenue, increasing IBM’s total footprint at the property to 362,092 square feet. The 15-year lease covers the entire 7th floor and brings the building to 72% leased. This lease follows the strong 2024 portfolio-wide leasing momentum during which the Company signed 188 leases covering 3,607,924 squar ...

NEW YORK, Jan. 21, 2025 (GLOBE NEWSWIRE) -- SL Green Realty Corp. (NYSE:SLG) (the “Company”), Manhattan’s largest office landlord, today announced that the Company will hold its 2025 Annual Meeting of Stockholders (the “Annual Meeting”) on Tuesday, June 3, 2025. The board of directors established the close of business on Monday, March 31, 2025, as the record date for determining stockholders entitled to receive notice of and vote at the Annual Meeting, which will take place in-person in the auditorium at On ...